I think I made a mistake, admits Osborne

• Tory attempts to draw line under fundraising dispute
• Shadow chancellor to opt out of talks with donors

George Osborne's rapid ascent to the role of shadow chancellor and right-hand man to the Tory leader has caused resentment among some MPs, who see him as arrogant. Photograph: Christopher Thomond Christopher Thomond/Guardian

George Osborne attempted yesterday to draw a line under the row over his contacts with a Russian billionaire when he admitted he had made a mistake in discussing a donation from Oleg Deripaska during his summer holiday in Corfu.

In his first one-to-one interview since his former friend Nat Rothschild accused him last week of soliciting a donation from the Russian, the shadow chancellor said he regretted his conduct.

Osborne told Radio 4's The World at One that he had not broken any rules because he had neither asked for nor received any money. But he added: "I think I did make a mistake. I think in politics it is not just what you say or what you do, it is how things look. I must be honest, it didn't look very good. I regret that."

Osborne said he had decided that as shadow chancellor, he would now absent himself from discussions with donors. "The real judgment is you learn from the mistakes you make," he said. "I have changed the way I am going to operate in terms of fundraising and I will not discuss individual donations with individual donors. That is an appropriate thing for me to do."

Osborne decided to come clean yesterday after what was generally regarded as a poor performance last week when Rothschild alleged the shadow chancellor had solicited a donation from Deripaska while he was a guest at the Rothschild villa in Corfu in August.

In his only media appearance of the week, Osborne jumped out of a car outside Conservative HQ at lunchtime on Tuesday to deny ever having solicited a donation. But he stonewalled questions about whether he had discussed whether to accept a donation.

Later that day Osborne released a 900-word account of his encounters with Deripaska on his yacht, which was moored in the bay in front of the Rothschild villa. He said in the statement that the idea of a donation was first proposed by Rothschild, an old Oxford friend of Osborne's, who is a close business partner of Deripaska's.

The shadow chancellor yesterday referred the BBC to his statement of last week when he was asked whether he had discussed the donation with Rothschild or Deripaska. "That is all there in the very detailed statement I produced last week. That was another judgment call I had to make: should I come out and be as transparent and open as I possibly could be? And I have done that."

Osborne contrasted his conduct with that of Lord Mandelson. "It is notable that other politicians who have been dealing with these people have not been as open as I have," he said.

The shadow chancellor put in place a careful media operation over the weekend to deal with the fallout from the Rothschild letter. His staff gave briefings on Sunday that he would be withdrawing from fundraising activity in the same way that Gordon Brown refused to have anything to do with fundraising as shadow chancellor and then as chancellor.Labour attempted to maintain the pressure on Osborne after yesterday's World at One interview. Denis MacShane, the Labour MP who wrote to Osborne last week about his contacts with Deripaska, said: "George Osborne is still refusing to come clean with the public about the nature of the conversations he had in which donations to the Conservative party were discussed. He has now confessed that he made an error of judgment, but for the sake of clean politics he now needs to answer the questions he refused to answer last week."

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